Creating and Appropriating Alliance Value through Customer-Centric Structures

Business practitioners have long recognized that their partners’ organizational structures influence alliance success, yet little is known about how allying with a customer-centric partner contributes to either alliance or firm performance. The authors propose a conceptual framework to examine how partners’ customer-centric structures influence alliance value cocreation and appropriation. Event study analyses (Study 1) of secondary multisource data from Fortune 1000 firms between 1998 and 2014 suggest that when two firms enter into an alliance, their structural asymmetry influences their ability to pool and integrate resources. Asymmetry enhances the combined benefits cocreated by the two partners forming marketing alliances, but it undermines the combined benefits of R&D alliances. The majority of the cocreated value gets appropriated by firms with customer-centric structures, rather than their product-centric partners. A complementary panel data analysis (Study 2) of a series of multiple alliances over time affirms that the net effect of marketing-intense (vs. R&D) alliance portfolios on long-term firm performance increases with the share of alliances in the portfolio that is marked by structural asymmetry (cocreation) and a firm’s customer-centric structure (appropriation).